James River Coal Company announced that it has entered into a definitive agreement to acquire coal reserves and rail loadout facilities in southern Indiana from Indiana Land and Mineral Company, LLC (IL&M).

The assets to be acquired include:

* 15.8 million tons of underground reserves located primarily in Pike and
Warrick counties, Indiana.

* 750,000 tons of surface reserves located in Pike County, Indiana.

* A rail loadout facility located in Pike County, Indiana.

"This transaction represents the next phase in our strategic plan to expand mining operations in the fast-growing Illinois Basin," said Peter T. Socha, the Company's Chairman and Chief Executive Officer. "The reserves are all located in close proximity to the existing mines of our Triad Mining subsidiary in southern Indiana. The rail loadout facility will allow us to increase our shipments to existing customers in the Illinois Basin. It will also give us the flexibility to ship coal by rail to potential customers located in other market regions. Through connecting rail service, we will be able to ship coal on both the CSX and the Norfolk Southern rail networks."

The purchase price for the acquisition will be approximately $9 million cash.

The IL&M transaction has been approved by the Company's Board of Directors and by the Board of Directors and members of IL&M. The transaction is subject to customary closing conditions, including the Company obtaining financing for the acquisition on terms and conditions approved by its Board of Directors. The Company will also explore completing this acquisition through a sale leaseback transaction with one its existing land company relationships.